July contract assessments mixed
Price assessments
C18 price ranges were adjusted to reflect July contract business, with several ranges increased because of the higher costs incurred during that month for feedstock bleachable fancy tallow (BFT).
C16 palmitic contract prices were assessed unchanged because of steady palmitic prices in southeast Asia that form the basis for the US range.
July Tall Oil Fatty Acids (TOFAs) were also assessed at a rollover from June, with no indications of increases from producers, despite snug Crude Tall Oil (CTO) conditions.
Feedstock
BFT prices in the Chicago cash market were at 52.50 cents/lb ($1,157/tonne, €810/tonne) on Wednesday, 3 August, edging down from 53.00 cents/lb on the previous Wednesday.
Crude soybean oil prices in the Chicago cash market were at 55.97 cents/lb on Wednesday, pushing the bean oil costs above the cost of the fat.
Fatty acid and refined glycerine market participants said prices on the fats and greases were likely to remain below the crude soybean oil costs because biodiesel producers could not easily cope with fats and greases surpassing the bean oil prices as a feedstock.
For biodiesel production, the cost of feedstocks represents about 85% of the production cost.
Co-product glycerine
Splitter crude from oleochemical processess was priced at about 14-15 cents/lb on a delivered basis, sources said.
That price level was opposed to the 5-8 cents/lb FOB midwest range for biodiesel 80% crude, unchanged from the previous spread.
Following typical patterns, most splitter crude was not in the commercial market. However, because of emerging applications in refined glycerine, market players have begun to take increasing note of both types of crude glycerine in order to try to assess potential new demand opportunities.
Traders said demand for bio-crude was flat. One reason for this was that the US continues to be net-short on glycerine refining capacity and biodiesel crude glycerine of 80-85% purity requires some treatment for salts and residues before it can be further processed into value-added fully refined glycerine.
The lack of ability to get the biodiesel crude glycerine refined to about 85-92% purity remains a limiting factor for the industry in getting sufficient crude to serve emerging applications.
The US continues to be a net-importer of refined glycerine, with approximately 40% of its requirements met by imports.
($1 = €0.70)
This week in ICIS news at www.icis.com
29/07/2011 22:10 US tallow prices fall on lower demand from biodiesel – traders
29/07/2011 21:32 Transatlantic rates fall in both directions on oversupply
29/07/2011 18:55 Chevron urges ‘stable policies’ as US debt crisis drags on
27/07/2011 21:27 ConocoPhillips acknowledges ‘uncertainty’ about JVs on split-up plan
